Groupon to take on Square

Electronic payments company, Groupon, is testing out its own Square rival, a mobile payments system for merchants that plans to undercut Square and other competitors' transaction fees, Bloomberg Businessweek reports.

Groupon aims for fees that are competitive with PayPal and Square, although the company says it has yet to finalise the fee structure, The Economic Times states.

Groupon may have flexibility to charge lower fees because it could subsidise the payments service from money it makes providing other services to merchants.

The Groupon reader, manufactured by Infinite Peripherals, is designed for businesses that rely on Groupon to market their wares, Gulfnews.com says.

The device is part of the company's efforts to increase revenue from the shops and restaurants that use its online coupons.

The company last year introduced Groupon Now, a service that lets users download coupons instantly to mobile phones.